Member Sign In

You are being directed to ZacksTrade, a division of Zacks & Company and licensed broker-dealer. ZacksTrade and Zacks.com are separate but affiliated companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.

If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.

Magellan Midstream boasts of a strong portfolio of energy infrastructure assets, capacity expansion plans and a sound liquidity position. Other positive attributes include its investment grade rating and strong track record for distribution growth.

Detailed Analysis

Magellan Midstream owns an attractive portfolio of energy infrastructure assets that generate stable and recurring fee- and tariff-based revenues. This includes the longest U.S. refined petroleum products pipeline system, access to more than 40% of refining capacity in the continental U.S. along with imports, and 85 petroleum terminals with more than 80 million barrels of storage.

Magellan Midstream has established a track record of consistent distribution growth – its current quarterly distribution of 53.25 cents per unit ($2.13 per unit annualized) is up by 306% since its initial public offering (IPO) at the beginning of 2001.

Lucrative acquisitions and organic growth projects have made major contributions toward Magellan Midstream’s development. Over the last 9 years, the partnership has invested nearly $3 billion for various ventures and takeovers. For 2013, the partnership plans to spend approximately $900 million on growth, with expenditures of $320 million thereafter required to complete these projects. Additionally, the partnership continues to look out for more than $500 million of potential growth projects in the earlier stages of development.

Financially, Magellan Midstream’s investment grade credit ratings provide a competitive advantage in accessing capital at reasonable cost. Additionally, with no near-term debt maturities and an $800 million revolver available under credit facility, the partnership is well equipped to face this highly uncertain period for the economy.

Based on the success of the partnership’s high-quality and diverse portfolio of midstream assets, analysts are predicting strong earnings growth for Magellan Midstream over 2013 and 2014. The 2013 Zacks Consensus Estimate of $2.49 represents earnings per unit growth of 23% over 2012. The Zacks Consensus Estimate for the next year is $2.70, corresponding to an impressive 8% growth.

Just Released: 5 Stocks Set to Double

Today, you are invited to download a free Special Report from Zacks Investment Research. It reveals five moves that could gain +100% and more in the next 12 months:

One company announced a cancer breakthrough that scored a 79% increase in progression-free survival in Phase III testing. Another is set to gain steam from a $3.45 billion acquisition. Still another has room for price increases that could send margins through the roof.

Top Zacks Features

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

Zacks Research is Reported On:

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1986 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1986-2011 and were examined and attested by Baker Tilly, an independent accounting firm.

Visit performance for information about the performance numbers displayed above.